This application will serve as the foundation on which the PI will build a major line of research dedicated to the area of alcohol and nicotine dependence treatment. Alcohol dependent smokers are at high risk for tobacco-related morbidity and mortality. Effective interventions are needed to reduce smoking prevalence in this population. Among smokers, a history of major depression has been identified as a major obstacle to smoking cessation. Individuals with a history of alcohol dependence and major depression may represent a population of especially treatment- resistant smokers. This new investigator proposal builds on our previous work and focuses on treatment of smokers with a history of both alcohol dependence and major depression. The theoretical framework on which this program of research is based is the social learning cognitive-behavioral model of relapse which emphasizes the role of situational variables and coping responses in addiction relapse. Our preliminary work suggests that a mood management intervention, designed to enhance coping with negative affect, may improve smoking outcomes for smokers with a history of alcohol dependence and depression. The first primary aim of this study is to evaluate the efficacy of a mood management intervention on 12-month smoking outcomes for 144 adult, abstinent alcoholic smokers with a history of major depression. A further aim is to examine mechanisms and processes of change associated with smoking treatment outcomes. The second primary aim is to examine the effect of the smoking treatments on alcohol abstinence and to identify factors associated with smoking and alcohol outcomes. The ultimate goal of this work is to develop effective interventions which will reduce tobacco-related morbidity and mortality in this high-risk population without adversely affecting alcohol outcomes. A randomized, two-group design will be used to evaluate the added benefit of a mood management intervention compared to a state-of-the-art smoking cessation treatment. The two conditions are: 1) Transdermal Nicotine Therapy and Behavioral Counseling (BC) and 2)BC plus Cognitive-Behavioral Mood Management Training (MM). Treatment will consist of 8 weekly group sessions. The major assessments will occur at end-of-treatment (week 8), and 1,3,6,and 12-month follow-up. Dependent measures include 7-day point prevalence smoking abstinence verified with expired air carbon monoxide and alcohol and drug abstinence verified with breathalyzer, urine drug screen and informant report.